Taking The Battle Against Patent Trolls To The Public

A group of technology and retail groups is beginning a national ad campaign targeting so-called patent trolls.

The Internet Association, National Restaurant Association, National Retail Federation and Food Marketing Institute

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Originally published on August 30, 2013 6:01 pm

Patent trolls — a term known more among geeks than the general public — are about to be the target of a national ad campaign. Beginning Friday, a group of retail trade organizations is launching a radio and print campaign in 17 states.

They want to raise awareness of a problem they say is draining resources from business and raising prices for consumers.

Patent trolls, known officially as nonpracticing entities, or NPEs, are companies that don't make or sell anything. They just own patents. They make their money by getting licensing fees from businesses that use technologies covered by the patents they own.

For many years, these "trolls" largely targeted companies that make new technologies and develop software. But Erik Lieberman, regulatory counsel for the Food Marketing Institute, one of the trade groups paying for the ads, says the patent trolls now target grocery stores, restaurants and clothing shops.

"We are not for the most part developing these technologies," he says. "We're simply using them." Among the other groups behind the ad campaign are the National Restaurant Association and the National Retail Federation. The ad campaign is their way of fighting back against the patent trolls.

The groups' radio ad turns a geeky topic into a dark drama. It has ominous music and tells a story that sounds like a nightmare for any red-blooded American entrepreneur.

A woman's voice says, "imagine you start the business of your dreams. You open your doors, work day and night, and that one store turns into 10. But then you get a letter from a patent troll."

Then, the ad uses a dark, creepy male voice to represent the troll who comes to ruin your dreams. The troll says it's got a patent on something really vague and general, like "the store locator map on your website. Either you pay us $100,000 or we'll sue you for everything you've got."

It's usually cheaper to pay than go to court, even if the patent isn't good.

The print ad explains a similar situation, and it's got a picture of a very ugly-looking troll.

The Food Marketing Institute's Lieberman says trolls are "posing a major barrier to entrepreneurship in this country." Business are paying a lot of money to settle with these trolls, he says. "The billions of dollars that we're facing in cost, many of those get passed on to consumers, so this is a consumer issue too."

As an example, Lieberman cites a troll using a patent for JPEG files to target stores like J.C. Penney, Foot Locker, American Eagle Outfitters and Macy's. If you've looked at photos online, or gotten a photo in an email, it's often a JPEG file. Lots of business use these files to send out promotional photos or post them on their websites. Lieberman says this troll wants all the companies that use JPEG files to pay up.

President Obama has said that companies like this are abusing the patent system. And Congress has several legislative proposals on the table to try to curb the business of trolls.

The anti-troll ad campaign is asking people to call and write their congressmen to do something about bad patents.

But that's easier said than done. Patent attorney Andrew Williams says even if there are some bad actors out there, there are a lot of perfectly good patents and inventors who deserve to get paid for their ideas. "The question is just how do you deal with it in Congress? How do you legislate to, as they say, 'stop bad patents'?" he says.

Williams notes that a recent report from the Government Accountability Office found that only 20 percent of patent litigation was brought by so-called trolls.

Both Democrats and Republicans agree it's a problem — a rare case of harmony in Washington. The trade associations hope that by putting a little spotlight on it, the two parties might feel pressure to actually do something.

Copyright 2014 NPR. To see more, visit http://www.npr.org/.

Transcript

MELISSA BLOCK, HOST:

From NPR News, this is ALL THINGS CONSIDERED. I'm Melissa Block.

ROBERT SIEGEL, HOST:

And I'm Robert Siegel. Patent trolls, companies that hold patents and live off challenges to other companies, are about to be the target of an aggressive advertising campaign. A group of retail trade organizations is launching radio and print ads in 17 states. The goal is to raise awareness of how patent trolls are draining resources from business and raising prices for customers.

NPR's Laura Sydell reports.

LAURA SYDELL, BYLINE: Patents are one of those topics that make a lot of people's eyes glaze over, but the radio ad is working hard to bring drama to a dry subject.

(SOUNDBITE OF AD)

UNIDENTIFIED WOMAN: Imagine you start the business of your dreams. You open your doors, work day and night, and that one store turns into ten, but then you get a letter from a patent troll.

SYDELL: A patent troll doesn't make or sell anything. It's a company that has a bunch of patents that may not be very good, but it goes around demanding licensing fees from businesses that do make and sell stuff.

(SOUNDBITE OF AD)

UNIDENTIFIED WOMAN: The troll claims to hold a patent on a common business practice like...

UNIDENTIFIED MAN: The store locator map on your website.

UNIDENTIFIED WOMAN: And says...

UNIDENTIFIED MAN: Either you pay us $100,000 or we'll sue you for everything you've got.

SYDELL: It's usually cheaper to pay than go to court. The ads sure make it sound like patent trolls are getting in the way of the American dream. Erik Lieberman says that is exactly what patent trolls are doing. Lieberman is the regulatory counsel for the Food Marketing Institute, one of the trade groups paying for the ads.

ERIK LIEBERMAN: They are posing a very big barrier to entrepreneurship in this country.

SYDELL: Not only that, says Lieberman, businesses are paying out a lot of money to settle with trolls.

LIEBERMAN: The billions of dollars that we're facing in costs, many of those get passed on to consumers, so this is a consumer issue, too.

SYDELL: Among the other groups behind the ad campaign is the National Restaurant Association and the National Retail Federation. For many years, a lot of companies that make new technologies and develop software were the targets of these so-called trolls. But Lieberman says now they target grocery stores, restaurants, clothing shops.

LIEBERMAN: We are not, for the most part, developing these new technologies. We're simply using them.

SYDELL: There is a less derogatory name for companies that own a lot of patents, non-practicing entities or NPEs. One of the NPEs that Lieberman cites is targeting JC Penney, FootLocker, American Eagle Outfitters and Macy's. The company says it's got a patent on a JPEG file. If you've gotten a photo in an email, it's often a JPEG file. Lots of businesses use them to send out promotional photos.

President Obama has said these kinds of companies are abusing the patent system and Congress has several legislative proposals on the table to try and curb the business of NPEs. So, not surprisingly, the anti-patent troll ads ask you to...

SYDELL: But easier said than done. Patent attorney Andrew Williams says even if there are some bad actors out there, there are a lot of perfectly good patents and inventors who deserve to get paid for their ideas.

ANDREW WILLIAMS: The question is, just how do you deal with it in Congress? How do you legislate to, as they put it, stop bad patents?

SYDELL: The issue is a rare one in Washington, in that both Democrats and Republicans agree it's a problem. The trade associations hope that by putting a little spotlight on it, the two parties might feel pressure to actually do something about it. Laura Sydell, NPR News. Transcript provided by NPR, Copyright NPR.